In commercial practices, drafting a Contract can be a long process, requiring much time and effort to develop and complete. A fully comprehensive contract can take months or even years to draft and complete for specific fields such as construction or transportation. Model contracts are used as a solution to save time and effort for the parties when participating in commercial activities. In this article, TNTP will clarify the issue of model contracts and the role of model contracts in commercial activities in Vietnam.
I. Overview of model contracts
Article 405 of the Civil Code 2015 has the following regulations on model contracts: “A model contract is a contract that includes terms set out by one party in a form for the other party to respond within a reasonable time; If the offeree accepts the contract, it will be considered as accepting the entire content of the contract according to the form provided by the offeror”. From the above regulations, it can be seen that a model contract is a type of contract in which one party has already drafted the contract contents, and if the other party in the contract replies to accept it, then it is considered as accepting the entire content with the form provided.
In addition, Vietnamese law also stipulates model contracts as follows:
• The model contract must be made public so that the remaining parties know about the content of the contract before signing. The process and format of publicizing the model contract shall comply with the provisions of the law.
• In case a model contract has unclear terms, the party drafting the model contract will be at a disadvantage when explaining those terms.
• In case the model contract has a clause that exempts the party drafting the model contract from liability while increasing the liability, or eliminating the legitimate rights of the other party, that clause will be void.
• For disputes between suppliers of goods/services and consumers, even though the arbitration clause has been stated in the general conditions of supply of goods/services prepared by the supplier, consumers still have the right to choose Arbitration or Court to resolve disputes. Suppliers of goods/services are only entitled to sue in arbitration if approved by the consumer.
II. Register sample contract
Based on the List of essential goods and services requiring contract registration according to the form issued with Decision 02/2012/QD-TTg, amended and supplemented by Decision 35/2015/QD-TTg, the following goods and services must register the model contract:
• Providing electricity for household use;
• Providing water for household use;
• Pay TV;
• Landline telephone service;
• Terrestrial mobile communication services (payment form: postpaid);
• Terrestrial mobile communication services (payment form: prepaid);
• Internet service;
• Transporting passengers by air;
• Railway passenger transport;
• Buy and sell apartments and daily-life services provided by the apartment complex’s management unit;
• Life insurance.
III. The role of Model Contracts in commercial activities in Vietnam
Model contracts provide many effects as follows:
• Using a model contract will save time and effort for the parties when negotiating and drafting the contract. In specific fields such as construction and international trade, where negotiating and drafting the contract can take a lot of time and effort, a model contract is often used by the parties for their convenience.
• For businesses that trade goods or services in large quantities, when the commercial activities that the business conducts are repetitive over a long period of time, model contracts will become a great help instead of negotiating many times about the same content in the contract.
IV. Some notes when using model contracts
Besides the benefits of model contracts, the parties need to pay attention to the following issues when using model contracts:
• It is necessary to carefully review and evaluate the contents of the terms in the model contract since accepting the model contract means agreeing with all terms in the contract, as well as any potential risks in the contract. For that reason, there can be some provisions designed in such a way that the benefits are completely towards one party in the contract, namely the one who drafted the model contract. In case of disagreement with some or the entire content of the contract, the proposed party has the right to request adjustments, or amendments to the contents of the contract or refuse to sign the contract.
• Model contracts cannot be used mechanically in all transactions, because each transaction has different matters and a model contract cannot cover it all. Therefore, depending on transaction practices, the parties can adjust the model contract accordingly to match the nature of the transaction.
Above is the content of the article “Model Contract in commercial activities in Vietnam”. TNTP hopes that this article has brought useful information and legal knowledge to readers.
Best regards.
